The VC Market Is Not Slowing Down, It Is Becoming More Selective - Gulamaly Hussain

Investor relations and fundraising professional Gulamaly Hussain on AI-led funding, India’s maturing startup ecosystem, GCC investor interest, and why founders must now sell evidence, not just ambition.

The venture capital market is not short of money. What has changed is the way money is moving. After the easy-liquidity years, investors across the world are becoming more selective, more data-driven and more focused on businesses that can show governance, execution capability and a realistic path to scale.

According to KPMG’s Venture Pulse, global VC investment reached US$330.9 billion across 8,464 deals in Q1 2026, with AI accounting for most of the quarter’s largest deals and the Americas attracting a major share of global VC investment. PitchBook-NVCA also reported strong US VC deal value in Q1 2026, showing how large AI-led rounds influenced the overall market. India has also continued to show resilience, with Bain and Company’s India Venture Capital Report 2026 noting that India’s VC/growth equity market reached approximately US$16 billion in 2025, marking its second consecutive year of growth.

In this changing funding environment, Gulamaly Hussain, a senior investor relations and fundraising professional with experience across private equity, banking, capital markets and GCC investor coverage, believes the VC market is not in a slowdown but in a correction of expectations. His professional journey reflects his focus on investor relations, fundraising strategy, private equity, GCC markets, due diligence and investor communication.

How would you describe the current VC market?

Gulamaly Hussain - I would put it simply - the market has not closed, but it has become more honest. Earlier, a good story, a large market and aggressive growth projections were often enough to get investor attention. Today, founders need to support the story with evidence.

Investors are asking sharper questions. Is the revenue real? Are customers staying? Is the company spending responsibly? Is the valuation justified? Can the business survive outside a high-liquidity environment?

So, I do not see this as a weak market. I see it as a selective market. Capital is still available, but it is flowing towards companies that can show discipline, clarity and execution.

What has changed most in investor behaviour?

Gulamaly Hussain - The biggest change is that investors are no longer rewarding growth at any cost. They are rewarding quality of growth.

A few years ago, speed was everything. Today, speed without discipline can become a red flag. Investors want to see whether the founder understands margins, cash burn, customer acquisition cost, compliance, reporting and long-term capital needs.

Another major change is due diligence. Investors are taking more time and looking deeper. They are not just evaluating the business model, they are evaluating the founder’s judgment. How a founder communicates during fundraising often tells investors how that founder will communicate after the money comes in.

How is AI influencing VC funding globally?

Gulamaly Hussain - AI is clearly the biggest investment theme right now, but it is also creating a more divided market. Strong AI companies, especially those building infrastructure, models, enterprise platforms or sector-specific solutions, are attracting large amounts of capital. At the same time, investors are becoming cautious about companies that use AI only as a label.

AI in a pitch deck is not enough. Investors want to know what advantage it creates. Does it reduce cost? Does it improve productivity? Does it create defensibility? Does it change customer behaviour?

CB Insights reported that 75 new AI unicorns were created in 2025, representing 61% of total new unicorns that year. That shows the strength of investor interest. But it also means the space is crowded. The next phase will separate real AI businesses from AI-led marketing.

Where does India stand in this VC cycle?

Gulamaly Hussain - India is in a strong position because the startup ecosystem has matured. It is no longer only about consumer apps or discount-led growth. Investors are now looking at fintech, SaaS, AI, healthcare, climate technology, manufacturing technology, spacetech, defence technology and logistics.

India also has a large domestic market, strong digital public infrastructure, improving exit opportunities and a deeper founder base. More founders today understand governance and investor expectations better than they did a decade ago.

For global and GCC investors, that matters. India is not just a growth story, it is becoming a more structured investment story.

How are GCC investors looking at India?

Gulamaly Hussain - GCC investors are increasingly interested in India, but they are disciplined investors. They are not looking only at growth, they are looking at trust, governance, reporting quality and exit visibility.

India offers exposure to consumption, technology, healthcare, financial services, infrastructure, manufacturing and renewable energy. These are areas that naturally attract long-term capital.

But Indian founders and companies must understand that cross-border fundraising is not just about getting access to investors. It is about communicating in a way institutional investors understand. The opportunity, the risks, the governance structure and the use of funds must be presented clearly.

In fundraising, trust is not built in one meeting. It is built through consistent communication.

Which sectors in India are likely to attract stronger VC interest?

Gulamaly Hussain - Fintech will remain important, but the next phase of fintech will be more specialised. Investors will look at wealthtech, embedded finance, lending infrastructure, compliance, insurance technology and financial inclusion.

SaaS is another strong area, especially where Indian companies can build for global markets. AI-led SaaS, vertical software and enterprise automation can attract serious capital if the product solves a real business problem.

Healthcare technology is also interesting because India has both scale and need. Diagnostics, medical devices, AI-assisted workflows, health financing and patient management platforms can become strong investment themes.

Climate technology, spacetech, defence technology and manufacturing-led innovation may take longer to scale, but they can create meaningful long-term value.

What common fundraising mistakes do founders make?

Gulamaly Hussain - The first mistake is approaching investors too early without preparation. A founder may have a strong business, but if the financials, projections, legal documents and data room are not ready, the process becomes weak.

The second mistake is over-selling. Investors appreciate ambition, but they do not appreciate unrealistic claims. It is better to be honest about risks and explain how the company plans to manage them.

The third mistake is poor follow-up. Fundraising is not one pitch meeting. It is a structured process. Timely responses, clear data, consistency and transparency all matter.

Founders should remember that investors are not only investing in the company. They are also investing in the founder’s ability to think clearly under pressure.

What role does investor relations play for startups and private companies?

Gulamaly Hussain - Investor relations is often seen as something only listed companies need, but that is not true. Startups and private companies also need strong investor communication.

Good investor relations helps a company build credibility before fundraising, during fundraising and after fundraising. It includes investor updates, due diligence coordination, board communication, performance reporting and narrative building.

It is not about creating hype. It is about making sure investors receive accurate information and understand the business clearly.

In a selective market, good communication can become a competitive advantage. Capital follows confidence, and confidence follows clarity.

What is your outlook for the VC market over the next year?

Gulamaly Hussain - I am cautiously optimistic. Strong companies will continue to raise capital, but weak fundamentals will be harder to hide.

AI will remain a major theme, but investors will become more selective within AI. India will continue to attract interest because of its market size, digital adoption, talent and improving exit environment.

The next phase of VC will not be about who can raise the fastest. It will be about who can build the most credible, scalable and well-governed business.

The market is not slowing down in the traditional sense. It is becoming more mature. And that is good for founders, investors and the ecosystem.

For more information, visit Gulamaly Hussain’s official website or connect with him on LinkedIn.